Bankruptcy courts come to rescue of enterprises

Those handling bankruptcy cases in China have become more professional in recent years and provided stronger support to market entities in dealing with debt disputes, an official from the country's top court said.

"Bankruptcy is an inevitable social phenomenon of survival of the fittest in the market economy, but it doesn't always mean 'death' for enterprises," Lin Wenxue, chief judge of the Second Civil Division with the Supreme People's Court, told media on Friday. "Bankruptcy reorganization and bankruptcy reconciliation, for example, are 'protection' and 'rescue' for enterprises."

China has built 14 bankruptcy tribunals so far to improve the professionalism of relevant case handling and help enterprises better solve debt crisis, he said, adding judicial teams for hearing liquidation and bankruptcy disputes have also been opened in nearly 100 courts nationwide.

"The specialized courts and tribunals have contributed a lot to restructuring of enterprises by rule of law," he said.

Besides, the country has also been intensifying efforts in solving personal bankruptcy disputes.

In July, for example, Shenzhen Intermediate People's Court in Guangdong province concluded the nation's first case of personal bankruptcy in accordance with the city's regulation, which was also the first legal document on individual bankruptcy in the country, Lin said.

Courts in some other jurisdictions, including those in Zhejiang, Jiangsu and Shandong provinces, are also exploring their ways of helping businesspeople withdraw from the market by rule of law, he added.

Liu Guixiang, a member of the top court's adjudication committee, said the effort on solving bankruptcy cases is one of judicial measures taken by Chinese courts in protecting the market entities and building a sound business environment.

Furthermore, courts across the country have also been required to take more humane measures when urging enterprises involved in lawsuits to implement rulings, he added.

"Every court should try its best to reduce the effect caused by lawsuits to enterprises and their normal business," he said, ordering courts not to push businesspeople to implement verdicts by excessively or improperly sealing up their properties.

According to him, by the end of 2020, more than 30 enterprises with debts of over 10 billion yuan ($1.5 billion) had completed restructuring and turned losses into profits thanks to the judicial assistance.

In 2020 alone, Chinese courts revitalized a total of 470.8 billion yuan of assets through judicial restructuring, helping 532 enterprises back to normal operation, he added.